Monday, February 9, 2009

Monday 02/09/09 - R:R is the Holy Grail

Risk:Reward is the Holy Grail. This isn't a new concept, just one that I'm finally coming to terms with; I mean really coming to terms with. I put on some terrible counter-trend short trades this morning in the mid 860s (completely overlooked the possibility of a gap-fill; also broke my rule of staying out of shorts above mid-point unless price was over extended; my bad). But I'm using a 1:2 Risk to Reward ratio on all of my trades, and that's the only reason I ended the day with a profit; albeit a small one. The ES/TICK chart produced some great setups today that were good for 4+ points a pop.

Yea, still working on discipline, but you gotta admit, I'm much better about it now than a couple of months ago :D

Ninja Trader and Trade Station, both automatically plotted the trades on the chart so it was quick and easy for me to post up the trade chart. As you know, today was on Sim since I'm still waiting for my account to be setup at Infinity. I'll try to manually mark up my trades on the chart for real $ trades. All depends on how much time it takes.

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Disclaimer

Trading of securities, options and futures may not be suitable for everyone and involves the risk of losing part or all of your money. Commentaries are educational in nature and are designed to contribute to your general understanding of financial markets and technical analysis. Use it how you want and at your own risk. I am not a registered investment adviser. This information is a general publication that reflects my opinion and is not a specific recommendation to any one individual. You must consult your own broker or investment adviser for investment advice. Controlling risk through the use of protective stops is essential.